MReport February 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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32 | TH E M R EP O RT FEATURE time, which ultimately reduces costs. Together, all of this can give lenders a competitive advantage— you can compete more effectively against other companies that are not using AI technology. Being able to process loans faster and more accurately will make your organization a more attractive lender, which will help you to win more business in today's highly competitive mortgage market. And when the compliance pro- cess can be done faster—both the verification of what is correct and identification of errors or missing information—it helps all of the different parties involved in the mortgage process. This includes the borrowers, who do not want to wait for a week to find out if all of their loan application docu- ments are correct or if they need to provide more information. Having this process happen more quickly reduces customer frustra- tion and improves satisfaction. Creating a better experience for buyers is the most critical aspect of customer service and can help lenders generate repeat business and referrals. A faster, better buying expe- rience is especially crucial for millennials, who make up a sig- nificant portion of today's home buying population. According to the National Association of Realtors 2018 Home Buyer and Seller Generational Trends Report, buyers aged 37 years and younger (millennials and Gen-Y) continue to be the largest generational group, making up 34 percent of all homebuyers. The study also notes that millennials have been the most active homebuyers for the last five years in a row. These numbers could continue to rise as the overall millennial population grows. According to population projections from the U.S. Census Bureau, millennials are expected to surpass baby boomers in 2019 as their numbers increase to 73 million people. This age group, which has grown up using technology and continues to use it heavily for per- sonal and professional purposes, wants a faster, more "retail-like," digital experience from lenders, similar to other services that they buy. When they shop for a mortgage, their first instinct is not to call a real estate agent but to search online. Millennials are comparison shoppers, and speed and ease-of-use are important criteria for them in nearly every- thing that they purchase. Having the ability to offer a seamless, all-digital experience that can process loans quickly is important to attracting and retaining the millennial home buying market. And, being able to process a loan even one-two days faster than another lender can make a big difference on who they select for a mortgage. In addition, millennials are quick to share their buying experi- ences (both good and bad) using social media, which can either help build a lender's business or damage their reputation. Positive peer reviews are important to this group, so it is vital to create a positive experience for buyers that may be quick to share their opin- ions of a mortgage lender online. AI also provides analytics tools that can help organizations optimize business operations. For example, you can determine the number of loans that your company is processing over time, enabling you to do forecasting that can help project future rev- enue and what resources will be required. Also, once a loan enters the system, lenders can determine the probability of that loan clos- ing, and approximately how long the process will take. This gives the lender more predictability in its revenue stream. How is AI Being Used Today? M ost companies have his- torically processed loans and rules manually, which is a prolonged, time-consuming pro- cess. Today, about 30-40 percent of vendors are still using this "old fashioned" approach. Now, many lenders are embrac- ing AI technology to do at least a portion of their processing, and it is a top priority for the future. To compete, survive, and grow in today's tight lending market, now is the time to embrace AI and ML technology. The capabili- ties of these technologies not only improve compliance, but also speed, productivity, and accuracy. This is important in a dynamic environment with a wide range of different rules that could change and expand over time. Those orga- nizations that fail to embrace this new technology, or are too slow to adopt it, could be left behind. JILL JONES is VP of Marketing at AI Foundry. She leads the marketing strategy, program creation, and analysis including digital marketing, demand generation, content marketing, communications, and operations to drive marketing and sales funnel activities. She has an extensive background in enterprise software and marketing that spans across numerous industries. She is based in Wakefield, Massachusetts. One key benefit to implementing AI is how fast all of this processing, verification, and classification can be done. There are more than 600 rules that could apply to a loan, so from a volume and capacity standpoint, there is a significant advantage to automating loan and rules processing.

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